In management, we all tend to worry about resource utilization, and may think that not utilizing our resources 100% is a bad thing. But in reality achieving 100% utilization is a myth or if you are reporting it as 100% then reporting is skewed. In a 8 hr. work , 7 hours are supposed to be utilized completely. We all easily assume that all the work carried out by human beings are instruction processing, but in reality most of the task performed by human beings are combination of idea generation, communication, training, coordination , instruction processing , thinking, reporting, research, collaboration etc. As we see above instruction processing is just a small part of our day to day job. Many of the other aspects of our job are not even being considered in many utilization reporting. Even if we consider those elements we can’t get an exact number so we may end up getting a skewed report. How funny it would be to report 20% or 25% as ‘thinking’ in our utilization reports.
Another important element of human being is helping each other in our day to day work, it may sound silly but in corporate world, we pet name it as collaboration. We never consider these activities in our utilization matrix. So without considering all these human elements if we see a utilization matrix as near to 100% then we should understand that there is something seriously wrong and its not a sustainable model.
An ideal utilization percentage can be somewhere around 70% to 75% and rest of the time should be well utilized for other human aspects of the day to day work. If our utilization is 70 or 75% , which is done properly then we can maintain a healthy team and quality work. This will bring more than 150% ROI and tr better than trying to increase the utilization to 100% and build a non-motivated, non performing team.
Lean and Agile practice can bring in more clarity to the process and thus identify bottle necks and wastages, but we should never consider Lean and Agile as a way to increase the utilization to 100%. A well reserved 30% buffer can do wonders to any organization, here is an example of how google does it (https://www.businessinsider.com/google-20-percent-time-policy-2015-4). In fact this 100% utilization is an idea taken out from manufacturing industry during the time of industrial revolution. This is very much applicable for machines which don’t think, collaborate or having any such humanly qualities.
Take a real life Information technology example. Consider a routine manual backup which may take up to 45 minutes, if we report it as 45 minutes then we are overbooking our time. In most of the time kick starting a manual backup might take just 5 minutes. But if we report this task as 5 minutes again it would be under booking our time as this task may need occasional checks till the task is completed. More over once in a while this task can fail and it may take more time troubleshooting and fixing the problem which includes communication, coloration, thinking etc. While it is true that a human being can multi task during this process but there is no easy and accurate way to book your exact time. I know this might not be an accurate example because the above process can be fully automated and many utilization reporting issues can be avoided . But this example would help us to understand the human elements involved in a simple task which are overlooked most of the times.